Hi all,
I hope everybody get an impressive gain this year end. Where the market will move in 2010? Some analysts have the opinion that the domestic economy will continue to improve in 2010. The Indonesian government predicted the economy to grow around 5.5% next year and while more optimistic analyst set target of 6% growth. This target is made based on the government objective to accelerate infrastructure projects in 2010. Spending on infrastructure projects will increase consumption and create growth for consumer and manufacturing goods. Another factor that supports this opinion is the recovery of global economic lead by US in the first quarter of 2010 followed by EU in the second quarter. Recovery of global economy is expected to increase demand for commodities and energy. Improved investors’ confidence to Indonesia economy also contributed to positive outlook on stock market next year as shown by net capital inflow to Indonesia market for the second half of 2009. This condition is expected to continue in 2010, especially fund inflow from foreign managers diversifying their portfolio from countries with elevated risk such as in China and other safe haven commodities investment. However there are also obstacles that are foreseen as the obstacles to economic growth in 2010. >From the global economic, capital outflow is the main risk when US moving from low rate regime and increasing the Fed rate in line with increased in inflation rate because of the economic recovery. The move will attract investment fund back to US from other countries like Indonesia and create liquidity problem in the market. Following suit, Indonesia central bank is expected to increase BI rate to reduce spread ratio. These conditions worsen by increased inflation rate forecasted by the government. >From regional economic scene, the Free Trade Agreement (FTA) between Indonesia and China will create heightened competition between local and China products. Market share from local products will decrease because of inflow of cheaper import products from China. >From the local scene, the government objectives to increase utilities and energy prices will increase inflation rate and unclear resolution from Century Bank case and other political instability will increase the risk to the market. >From technical point of view, IHSG un-broken upward momentum from mid 2009 will increase risk of market downturn at the first quarter of 2010. This condition is supported decrease in trade volume seen in fourth quarter 2009 and other technical indicators that shows strength diminishing. Just my personal opinion. Please share... :-)
